How to Catch a Thief? (Henry Litton)

HOW TO CATCH A THIEF?

Henry Litton, Honorary Professor

Introduction

Hong Kong has a wide panoply of laws protecting personal rights, including rights of property. Many would say that the courts have, for the past 20-odd years, over-emphasized personal rights to the detriment of community interests. They have, on many occasions, allowed lawyers to turn the Basic Law into a weapon of mass destruction, to strike at regulatory regimes established by local law. The Face Mask case is a good example.

     The culture of the Judiciary leans heavily in that direction. Would the courts go even further and, applying the same criteria, allow the full weight of the law to be deployed to protect private property which might constitute the proceeds of serious crime? Everyone would say: You must be joking.

     This essay examines two recent cases where Bench and Bar danced hand in hand, flirting with this possibility. And it would seem that, in the second of the two cases – Tam Sze Leung v Commissioner of Police [2021] HKCFI 3118 (Coleman J) – a judge of first instance has in effect struck down the entire statutory regime dealing with the investigation of organised and serious crime involving banks and other financial institutions, though he did not actually say so: pending, he said, a “further round of submissions” from counsel. Tam Sze Leung bears the title “Judgment” – 79 pages of it – but all it “adjudged” as things stand today is this: counsel for the applicants, according to the judge, had won the debate on two legal points, but he shied away from the consequences of that finding. No order was made. So the matter hangs in the air. And there is a further problem. An earlier judgment from the Court of Appeal – Interush Ltd v Commissioner of Police [2019] HKCA 70 (Cheung, Yuen JJA and G Lam J)– had ruled that the statutory regime was constitutional.

Banks and Financial Institutions

Banks are, on the whole, highly respected institutions. Most people have bank accounts. Bank of China, HSBC, Bank of East Asia are household names with global reach. The range of their customers would be immense, from princes to peasants, from the highly respectable, the questionable, to the downright crook. Whilst, in theory, a cardinal principle of good banking is “know your customer”, in practice that is not possible in every case.

International Transfers

Moving money internationally is core banking business, and that is where organised crime comes in. Drug trafficking, for instance, takes place on an international scale; the proceeds are immense. Money is the life-blood of drug trafficking and other serious organised crimes. When money is placed in a bank account, held by a proxy, it takes on a veneer of respectability. When transferred through banking processes, the money gets “laundered”. The UN Office on Drugs and Crime estimates that the amount of money laundered globally is 2-5% of world GDP; that is, US$800 billion to US$2 trillion annually.

War on Money Laundering

To combat this worldwide menace, developed countries have adopted similar solutions: to enlist the help of banks and other financial institutions in the investigation of organised crime, and to adopt measures to deprive criminals of their proceeds of crime.

Hong Kong Legislation

In Hong Kong the Drug Trafficking (Recovery of Proceeds) Ordinance (Cap 405), was amended in 1995 to add Part V to the statute; in particular, sections 25(1) and 25A. These sections, in essence (1) require a bank, when it “knows or suspects” that money held in an account represents the proceeds of crime, to disclose that knowledge or suspicion to an authorised officer; and (2) criminalise the bank if, having such knowledge or suspicion, it deals with those proceeds without consent from the authority.

     At the same time provisions identical to sections 25 and 25A of Cap 405 were enacted to deal with other organised and serious crimes by passing the Organized and Serious Crimes Ordinance (Cap 455).

Investigative Process

As part of the mechanism in its investigative process, the Hong Kong police has set up a unit called the Joint Financial Intelligence Unit (JFIU) to work with the banks. The head of that unit constitutes the “authorised officer” for the purposes of statutory disclosures under s 25A of the Ordinance.

     The relationship between the banks and the JFIU is a delicate one. Banks have contractual obligations to their account-holders. Where police suspicion is aroused, its focus is on the criminals involved; any money and assets held in a bank account is only one of the components in their investigation. By its very nature, it is an ongoing process and there can be no parameters to an investigation. One clue leads to another.

“No Consent Scheme”

Banks have internal records which, when analysed, might provide clues to the source of funds kept in an account. But, at the start of an investigation, these records are not accessible to the police. Hence any investigation under Part V of Cap 455 must necessarily involve liaison with the relevant bank. For this purpose the police has formulated guidelines or protocols in their Force Procedure Manual under the heading of “NO-CONSENT Mechanism in respect of Property held by Financial Institutions”.

      Where the police, from external sources, have reason to believe that an account-holder might be involved in serious organised crime, the first step, obviously, is to relay its concern to the highest management levels of the bank. Confidentiality would be crucial to preserve the integrity of the investigation. There can be no standard response from the bank. It may concern a long-standing customer of utmost integrity, or perhaps a case of mistaken identity; or it could be a borderline case that requires further investigation internally. It is a matter for the bank alone to assess what risks it runs in continuing to deal with the customer. All this comes under a label called a “Suspicious Transactions Report” (STR).

     When the police has received the STR, how the JFIU and the bank then manage their relationship would depend on multiple factors relevant to the investigation. If, for instance, amounts are regularly taken out of a suspect account, the police might wish for that to continue, in order not to arouse the account-holder’s suspicion; or it might be to trace the recipient of those funds. The local account-holder might be a mere nominee for a kingpin overseas, the prime target of the investigation. In terms of s 25A what this means is that, though the funds have come under suspicion – and dealing would constitute an unlawful act – the bank is relieved of criminal liability by the police taking no action, allowing the dealing to continue. But the primary responsibility for not dealing with tainted property rests always with the bank.

“LNCs”

There may come a time when the investigation has matured to the extent that funds in the account should be temporarily frozen to enable the next step to be taken: arrest of the suspect and an ex parte application made under s 15 of the Ordinance for a restraint order over the funds. The mechanism for this process, where the police tells the bank that withdrawals are no longer allowed, as far as the police is concerned, came to be known as “letters of no consent” (LNCs). The effect, of course, is that the bank comes under notice that any dealing with the funds would be considered a criminal act under s 25(1) of the Ordinance.

     The suspension (or “freezing”) of the account would be an act of the bank, depending on its assessment of the situation. In some cases, banks have written agreements with account-holders which confer a wide discretion on the bank to suspend an account, to protect the bank’s own interests. The bank would then not need an LNC to suspend the customer’s account, if it considers it necessary to do so.

    At the time when an LNC is issued, the bank would probably have far more information on the customer than the police, through its internal records, or interviews with the customer. The police is not infallible. It is possible that the bank disagrees with the police assessment. To preserve a valued relationship with the customer, it is possible that the bank ignores the LNC, or delays acting on it.

     It is worth noting that the statute itself contemplates the possibility of the police having made a mistake; s 29 of Cap.455 makes provisions for the government to pay compensation where, for instance, criminal proceedings against the suspect resulted in acquittal.

Convenient Labels

As can be seen, "STRs" (suspicious transactions reports), “LNCs” (letters of no consent) etc are mere labels to indicate steps in an ongoing investigation, sign-posting the stage of the continuing liaison between the police and the bank under the s 25 and s 25A statutory regime. In the meanwhile the account-holder remains in ignorance; the integrity of the investigation might be fatally compromised if he knew what was going on. There can be no hard and fast rules regulating the conduct of the parties – the police and the bank – in operating what came to be known as the “No Consent Regime”.

     “Regime” is, perhaps, too strong a word, as no rights or liabilities of any kind exist under that arrangement. Plainly, there is no room for judicial intervention in this process. Under normal circumstances, there can be no justiciable issues which could arise from the way banks and the police work together under the s 25 and s.25A statutory regime. It is fruitless to speculate as to what might happen if the police used the LNCs process for some ulterior or illegitimate purpose. In the two cases under discussion, there was no suggestion that the police had acted improperly in any way.

      But this, alas, did not deter lawyers chancing their arms.

A. Interush Ltd v Commissioner of Police [2019] HKCA 70 (Cheung, Yuen JJA and G Lam J)

This is a judgment (49 pages) delivered by the Court of Appeal on 17 January 2019, following a hearing in October 2018. It dealt with events going back to 2013.

     The first-named company had substantial accounts with the Heng Seng Bank and the Bank of East Asia. It was suspected of operating a pyramid scheme involving Mainland investors, contrary to the Pyramid Schemes Prohibition Ordinance (Cap 617).

     On 1 November 2013, the police started an investigation, having been alerted by a newspaper article. On the same day the Bank of East Asia suspended the company’s accounts under the terms of a merchants’ agreement, and the Heng Seng Bank gave an STR to the JFIU.

     On 6 November the police sent to the Heng Seng Bank an LNC covering the accounts held by the applicants. That bank also suspended the company’s accounts. It is not clear when suspension took place. In subsequent proceedings the Heng Seng Bank asserted that, under its agreement with the company, it too had the contractual right to suspend accounts at its discretion, to protect its own interests. By implication, it was saying that the LNC was an unnecessary step.

     Following searches at the company’s office, five members of the company’s senior management were arrested. Two days later the CEO surrendered to the police. He too was arrested, and subsequently charged. Analysis of the company’s books revealed massive transactions involving 49,000 “investors” from several provinces in China. Inevitably, the investigation took a considerable time.

     In July 2014 the company started civil proceedings against the two banks. Later on in the same year, it applied for judicial review against the police.

The Judicial Review

On 10 February 2015, Au J gave leave to start proceedings for judicial review. The application was heard by Patrick Li J in June 2015. The judge described it as a judicial review “on the constitutionality of s. 25 and 25A” of Cap 455. At the same time the applicants also challenged “the propriety of the decision-making process under s.25A(2)(a) - no consent scheme”.

     Section 25A(2)(a) says:

“If a person who has made a disclosure referred to in subsection (1) does any act in contravention of section 25(1) ( whether before or after such disclosure ),and the disclosure relates to that act, he does not commit an offence under that section if (a) that disclosure is made before he does that act and he does that act with the consent of an authorized officer...”

After much huffing and puffing, counsel’s arguments boiled down to one point: There was no time limit to an LNC and that rendered the “no-consent scheme” unlawful. As to which Patrick Li J said:

“It may minimize dispute if time limits are set out in the law. This however is a matter of social choice after balancing the rights of an individual and the public interest in crime prevention and law enforcement. Ultimately, it is the decision of the Legislative Council. It is impossible for this court to decide what is the appropriate time limit”.

By his judgment of 5 August 2015, the judge dismissed the application.

     Over three years later, the company’s appeal was heard by the Court of Appeal on 19 and 22 October 2018. By that time the matter was utterly stale and of no practical consequence, for the “indictable offence” under which the company’s CEO was charged failed: he was acquitted after trial on 31 May 2017.

Constitutional Challenge

Why the Court of Appeal proceeded with hearing the appeal is a mystery. The relief sought in the judicial review application is breath-taking. The applicants wanted, among other declaratory relief, a declaration that ss 25(1) and 25A of the Organized and Serious Crimes Ordinance are unconstitutional for being inconsistent with the protected rights under Articles 6 and 105 of the Basic Law, reversing Patrick Li J’s finding. In other words, the entire scheme for combating organised and serious crime, involving banks and financial institutions (and other third parties), must be erased from the statute book, in the protection of the applicant’s private property rights (which might have constituted proceeds of crime).

     At para 6.5 Cheung JA, giving the first judgment, said this:

“In my view, section 25 whether by itself or in combination with section 25A does not engage property rights. Section 25 merely sets out the creation of the offence of dealing with property known or believed to be the proceeds of an indictable offence. By no stretch of the imagination can this section be held to have an effect on the property rights of the applicants. However, section 25A is a different story. In coming to this view I respectfully adopt the analysis in Garnet”.

An Odd Approach

This is a very odd approach. “Garnet” refers a judgment of the Guernsey Court of Appeal where BNP bank account-holder Garnet Investment Ltd had sought the relevant authority’s consent to allow dealings with its bank account; the authority (Financial Intelligence Service) had refused to give consent. The factual basis of the applicant’s case was that the authority’s refusal was a wrongful act in public law. It was fact-specific. If the application for relief had succeeded, that would have affected the applicant company, the BNP bank and no-one else. But in the case before Cheung JA, the relief sought was a declaration that the entire statutory scheme comprised in s 25(1) and 25A was unconstitutional; if granted it would have affected the entire community, not simply the applicant companies and the banks involved.

     The case turned on a proper interpretation of Articles 6 and 105 of the Basic Law, as applied to s 25(1) and 25A; it is bizarre to think that a Guernsey court had anything to say about that.

The Mountain of Words

With such an approach, it is not surprising that the judgment descended into an account of counsel’s arguments and counter-arguments covering multiply pages of indigestible text. The case as presented to the court on paper was a constitutional challenge to the statutory scheme comprised in ss 25(1) and 25A of Cap 455. But the arguments were not so directed. They were aimed at discrediting the so-called No Consent regime or the LNC scheme. But these were just labels. They created no rights or liabilities giving rise to justiciable issues and practical relief. No wonder the judgment dissolved into clouds of words. At para 6.44 the judge sets out Senior Counsel’s arguments covering three full pages; and at para 6.44 (f) the reader is asked to study the Canadian Criminal Code, sections 462.31 and 462.33, and “the useful summary” of the Canadian regime in AG of Quebec v Laurent Laroche and Garage Cote [2002] 3 SCR 708 at paras 23-46. And there are many other pieces of reading from Australian sources, and New Zealand sources (covering more than half the page). Had the judge read any of them? What did he make of them? How were they relevant to any issue he had to resolve? No one knows. The reading list is simply left in the air. The oddity of this approach is even greater when, at para 6.51, one finds the judge saying: “…..a comparison with the anti-money laundering provisions in other countries is not appropriate. As Mr McCoy had submitted, it is not helpful to refer to these provisions without an understanding of the vast landscape of powers available to those jurisdictions with anti-money laundering and anti-terrorist financing measures”.

      The “No Consent Scheme” was an abstraction, a label given to a highly flexible arrangement between the police and the banks, not amenable to judicial review. What was put before the court for debate was a constructed narrative, not a real case. Counsel was tilting at windmills, and the court solemnly dealt with this farcical exercise.

The Core Issue Side -Stepped

The core issue before the court was this: Were ss 25(1) and 25A of Cap 455 compatible with Articles 6 and 105 of the Basic Law (articles requiring the HKSAR to protect property)? That, at any rate, was how the matter was formulated at the beginning of Cheung JA’s judgment. By the end of the judgment, that had been forgotten and the matter had shrunk to whether the “no consent scheme” was constitutional.

     Godfrey Lam J, in his short judgment, tried to salvage something from the wreckage. He said this (para 11.2):

“The applicants’ main argument before us boils down to the contention that the consent regime found in ss 25 and 25A OSCO was deficient in not providing for an express fixed time limit after which the “informal freeze” would expire and cease …….It is true that OSCO does not lay down any express expiry time for the informal freeze. But equally it contains nothing that prevents the authorities from exercising their powers in a way that common law principles and respect for the property rights protected by Articles 6 and 105 of the Basic Law may require, or impedes the courts from giving relief where there is a failure by the authorities, in any particular case. The applicants have in my view failed to demonstrate that the consent regime systematically mandates a result that is incompatible with the Basic Law such that the relevant provisions should be declared unconstitutional”.

Yuen JA said she agreed with both judgments, whatever that meant.  And thus it was that the appeal was dismissed.

     Did the Interush Judgment Establish a Precedent?  Had the Court of Appeal in Interush firmly ruled that the statutory scheme under s 25 and s.25A was constitutional? It appeared so. Was there a lacuna in the law which lawyers were able to exploit ? They took it as such, and this promptly led to the next case.

B. Tam Sze Leung v Commissioner of Police [2021] HKCFI 3118 (Coleman J)

The Facts

This case concerns a family of four. They had accounts with various leading banks in Hong Kong. The total value of the accounts was around HK$30 million to $40 million (including cash and assets of fluctuating value).

     Some time in the past (the judgment is imprecise as to dates) the family came under suspicion of offences contrary to the Securities and Futures Ordinance (Cap 571) and their premises were searched. On 25 November 2020, the Securities and Futures Commission (SFC) referred the matter to the police for investigation. On 27 November, the JFIU alerted the banks to this fact and asked the banks to file STRs, asking them to suspend the operation of the accounts. The banks filed their STRs at various dates, and these were first referred to the Financial Investigation Division of the police which, after examination, asked the JFIU to issue LNCs on dates between 1 and 17 December 2020.

     When the successive accounts got suspended by the banks, the applicants consulted solicitors. By letter dated 8 December, the solicitors asked the police whether LNCs had been issued and to provide the legal basis for issuing them. In reply the police told the solicitors that the applicants were “currently under investigation by Financial Investigations Division, Narcotics Bureau for a case of Dealing with property known or believed to represent proceeds of indictable offence” and asked the solicitors to ask their clients to contact the police. The applicants never did so.

    On 4 March 2021, the applicants were arrested for “money-laundering”; they remained silent under questioning and were released on police bail. The investigation continued. In April, production orders were obtained and served on 29 entities including banks and security firms. Over 10,000 pages of material were produced.

     On 11 October, restraint orders were made, ex parte, by a High Court judge on the accounts, with a return date for an inter partes hearing on 13 December 2021.  In consequence of the restraint orders, the LNCs were withdrawn by the police.

Application for Leave to Start Judicial Review Proceedings

Way back in February 2021, the applicants had applied ex parte to the High Court for leave to start proceedings against the Commissioner of Police. This was entertained by Chow J. He shirked the responsibility of deciding whether the applicants had an arguable case; this was surprising, as he must have had before him the Court of Appeal’s judgment in Interush (delivered back in January 2019, which seemed to cover the same grounds as the matter before him). Chow J ordered a “rolled up” hearing: that is to say, that the Commissioner of Police should be heard as to whether there was an arguable case against him.

Abuse of Process

The process is strictly governed by rules. Order 53 Rule 3(2) says that an application must be made ex parte in Form 86 which must contain, among other matters, “the relief sought and the grounds on which it is sought”.  The relief sought would be in a few words; for example, certiorari, an order to quash a decision or action on the ground of procedural unfairness, or ultra vires, excess of jurisdiction, or gross unreasonableness etc. There are only a handful of grounds, known to the law, on which a challenge to the exercise of executive authority can be made. This is fundamental to the separation of powers. It is not the business of the courts to run the government of the Hong Kong SAR.

     As to a “constitutional challenge” to statute law, often referred to as a “systemic challenge”, there can only be two platforms: the Hong Kong Bill of Rights and the Basic Law. Hence, a properly completed Form 86 cannot possibly constitute more than one or two sheets of A4 paper. Where there are multiple grounds it is a certainty that the application has no real focus and is an abuse of the process.

     Here, according to Coleman J’s judgment, “the Form 86 comprised over 60 pages of closely typed description and argument …..”. Why Chow J did not dismiss the application out of hand, but ordered a “rolled up” hearing instead, is incomprehensible. It was an abuse of process staring the judge in the face.

Coleman J commented as follows:

“The recent culture in the context of judicial review proceedings for there to be excessive prolixity and complexity, in what are supposed to be concise grounds for judicial review, as often as not serves to conceal rather than illuminate the essence of the case being advanced”.

“Conceal rather than illuminate the essence of the case being advanced” indeed !

The Jumble of Garbled Arguments

Coleman J heard the matter on 19 and 20 October 2021, by which time some eight months had passed since Chow J had dealt with the matter. Much had happened on the ground, which made of the hearing even more of a farce.

     Not only was Coleman J faced by a Court of Appeal judgment which had a binding effect on him, there were also two significant events affecting the judicial review. One, the applicants had been arrested, and two, restraint orders had been made on the accounts a week before the hearing, and the LNCs had been withdrawn.

     What possible standing could the applicants have to maintain their application for relief when Coleman J began the hearing on 19 October 2021?  Undeterred, the judge soldiered on, and produced a 79-page judgment which no-one could possibly understand.

The Grounds for Relief

Stripped of verbiage, the grounds set out in the judgment boiled down to three:

One, the issue of the LNCs by the police was tainted by procedural unfairness.

Two, the “No Consent Regime” was not authorized by ss 25 and 25A of Cap 455.

Three, the statutory scheme under s 25 and 25A violated constitutional protection of private property under Articles 6 and 105 of the Basic Law.

     As regards One, that was an absurdity. Counsel’s argument was that a suspect must be given an opportunity to make representations to the police before LNCs are issued. To catch a thief, the police must first tell him they are about to set out to catch him.

     As regards Two, the judge said there were two concerns: “(1) the true extent of the Commissioner’s powers to freeze funds held at banks, outside the statutory regime providing for obtaining restraint orders granted by the High Court and (2) the sufficiency of safeguards over any such powers”.

     To talk of the “Commissioner’s powers to freeze funds” is to grossly distort and misrepresent the mechanism governing the relationship between the police and the banks. The prime feature of that relationship is flexibility – which the judge himself acknowledged later on in his judgment. He said (para 53):

“…the consent regime gives the police operational freedom to grant relief from criminal liability in circumstances where it is considered to be in the interests of law enforcement to do so, such as avoiding a suspected criminal becoming aware of the suspicions, or permitting a controlled transfer to take place so that funds can be traced for investigative purposes…”

In sending out an LNC the police is not “exercising power” of any kind. If the account is suspended, the “freezing” is done by the bank concerned, not the police.

     Earlier on, the judge had referred to the “fundamental right” of suspects to use their own property in the “form of funds held in a bank account” (para 5). “Fundamental right”? That is absurd. An account-holder’s right is a contractual right; the right of a creditor (the account holder) vis-a-vis the debtor (the bank). If nothing else were said, the account holder would have a right to withdraw the sum held on demand. But there could be strings attached, depending on the terms under which the sums are held. But with that misconception in mind at the outset, no wonder the judgment got tangled up with counsel’s arguments.

     The huge volume of submissions by counsel, and the citation of overseas cases, boiled down to one thing: that there exists no theoretical time limit for the duration of LNCs. But, in so far as one can find the core determination of the Court of Appeal’s judgment in Interush it is set out in Patrick Li J’s judgment which was upheld by that court: 

“It may minimize dispute if time limits are set out in the law. This however is a matter of social choice after balancing the rights of an individual and the public interest in crime prevention and law enforcement. Ultimately, it is the decision of the Legislative Council. It is impossible for this court to decide what is the appropriate time limit”.

It is binding on Coleman J at first instance. Notwithstanding this, he found “the No Consent Regime as operated by the Commissioner is ultra vires” (para 93).

      As to Three, that is an absurdity. Under the statutory regime in ss 25 and 25A of Cap 455 the court is dealing with suspected proceeds of serious crime. To think that Articles 6 and 105 could extend to protect such property is to make mock of the Basic Law. Yet the judge devoted tens of pages of his judgment to this issue. Ultimately he found that the No Consent Regime as operated by the Commissioner is not “prescribed by law” (para 118) and that it failed “the proportionality assessment” (para 160), presumably striking down the entire statutory scheme in ss 25 and 25A, though he did not say so, provisions which the Court of Appeal appears to have ruled as constitutional.

The Outcome

If the judgment made sense, why did the judge not make orders appropriate to his determinations? The reader is left reeling by this stage.  In para 168 (page 78) the judge said this:

“Mr Chan (counsel for the applicants) and Mr Dawes (counsel for the Commissioner) are in agreement that there can usefully be a further round of submissions on relief, once the parties have had the opportunity to consider this judgment. At the same time, I can deal with any other consequential matters as might arise”.

Is this effective administration of law, or is this – once again – a case where the court becomes a debating chamber and the weight of a judgment is measured by the volume of words rather than the effect of remedies? Earlier in his judgment, Coleman J referred to “the recent culture in the context of judicial review proceedings” where “excessive prolixity and complexity” plague the process.

     The judge offered no relief at the conclusion of his 79-page judgment, and invited a “further round of submissions”. In the meanwhile, what is the Commissioner supposed to do? To suspend all operations under ss 25 and 25A of Cap 455 ? Or to treat the judgment simply as a jumble of words, of no practical consequence?

Post Script

Not surprisingly, the parties found themselves entangled in a sticky web of words, after the determination was handed down on 30 December 2021. There was no “judgment” or “order” on which the Commissioner could lodge an appeal. So time for appeal had not begun. But, out of an abundance of caution, the Commissioner lodged an application on 19 January 2022, seeking an extension of time to enable an appeal to be lodged “28 days from the date of the Court’s decision on relief, costs and consequential matters”.

    The matter went before Coleman J, who made no order on that application. He said that the time for filing any notice of appeal had not begun. He then added: there was “no relevant final form of order made, from which any appeal might lie”.

     And thus the matter rests. Just a jumble of words. A dead letter. Presumably the Commissioner and the banks will continue to deal, as they have done in the past, under the framework of ss 25 and 25A of the Ordinance, regardless of what the judge had said.

The Rule of Law

The rule of law requires effective action, not just words. Its focus is always on remedies. A courtroom is not a coffee house, where arguments and suppositions are freely traded. It is a venue for the determination of rights and liabilities. A court, acting properly, never acts in vain.

     This case brings into sharp focus the deep-seated malaise in the Judiciary. At times judges seem to forget their own constitutional role and justify their actions by deferring to counsel. The practice is not only demeaning; it compromises Hong Kong’s future.

      The White Paper issued by the Central Government in December last year is an extremely important document for Hong Kong. It sets the course firmly for the principle of One Country Two Systems to apply in the long term.

      At the heart of the Hong Kong system is the rule of law; that is to say, the common law as practised in the courts. The question will soon be asked: Is it capable of vigorous and effective implementation of the principle of One Country Two Systems ? Is it fit for purpose?